The present invention generally relates to transaction authentication systems, and more particularly to a transaction authentication system which authenticates a transaction which uses an integrated circuit (IC) card after the transaction is made.
Presently, transactions using cards are popular due to their convenience. But on the other hand, illegal use of such cards is increasing and it is becoming more and more important to authenticate the transactions.
Conventionally, when authenticating a transaction which uses a magnetic stripe card, verified data is generated within a terminal device in conformance with a predetermined algorithm and is added to transaction data. The uniqueness of the data is used when discriminating whether or not the transaction is correctly performed.
For example, the magnetic stripe card is loaded on a point-of-sales (POS) terminal or the like when using a credit service. Prior to making a transaction, a check is made to prevent illegal use of the magnetic stripe card. For example, a personal identification number (PIN) is entered by the user and the POS terminal discriminates whether or not the entered PIN corresponds with a PIN which is prerecorded on the magnetic stripe card. The POS terminal discriminates whether or not the use of the magnetic stripe card on the POS terminal is permitted based on a terminal confirmation code. After it is discriminated that the PIN entered by the user corresponds with the PIN prerecorded on the magnetic stripe card and that the use of the magnetic stripe card is permitted on the POS terminal, the POS terminal adds verified data to the transaction data and temporarily stores the data on a recording medium. The verified data is generated within the POS terminal in conformance with a predetermined algorithm. For example, the recording medium is a flexible disc. After the transaction ends, transaction historical information is transferred to a host computer within an operation center or the like by a batch data transmission.
The character of the verified data differs from that of the PIN in that the user is unaware of the existence of the verified data and the verified data is not used for prohibiting the transaction. Normally, a check is made after the transaction is made to determine whether or not the value of the verified data is in conformance with the generating algorithm so as to discriminate whether or not the transaction made was legitimate.
However, a person who is familiar with the operations and functions of the POS terminal may easily decode a program for generating the verified data. Furthermore, a person who somehow finds out the generating algorithm for generating the verified data may easily and freely operate the POS terminal without using a magnetic stripe card. Such persons can make an illegal transaction by fabricating or altering the transaction data and the verified data. When making the illegal transaction, such persons can easily make the verified data, which is added to the illegal transaction data, take a value in conformance with the generating algorithm, and in this case, it is impossible to find out that an illegal transaction was made. An integrated circuit (IC) card also suffers a similar problem because the verified data is generated and added to the transaction data within the terminal.